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Since the level of the U.S. National Debt passed the 8 trillion USD mark in October 2005, I've had a nagging question: how come the share of the national debt that would be shared equally among all American men, women and children only amounts to $26,727?

In constant Year 2000 U.S. dollars, that's $6,193 more per person than the peak level of the U.S. National Debt per capita achieved in 1945 thanks to the financing requirements of World War II (the 2005 National Debt per Capita figure is $23,799 in Year 2000 USD, while the 1945 National Debt per Capita figure is $17,606). So, again, if one assumes that the national debt is spiraling out of control, as the editorials posted beside the “U.S. National Debt Clock" seem to suggest, why isn't the amount of the U.S. National Debt per Capita substantially higher?

Growth

In one word, that’s it. To be more specific, the reason the U.S. National Debt per Capita isn't higher than it is the result of the combination of economic growth and population growth. Political Calculations has previously looked at the relationship between the U.S.' National Debt and National Income from 1900 into 2005, but looking at the National Debt-to-Income Ratio doesn’t capture the growth of the U.S. population. So, we went back to the drawing board to figure out how to add population to the debt/income mix.

On the Drawing Board

To begin, we’ll start with the National Debt to Income ratio (DTI), which is obtained by dividing the National Debt (D) by the National Income (GDP):

At this point, I should note that the Debt to Income ratio is also equal to the ratio of National Debt per Capita (D/P) to National Income per Capita (GDP/P), where P represents the U.S. Population:

We can rearrange the terms in the expression above to come up with the Debt to Income per Capita Index (DTI/P):

So, the Debt to Income per Capita Index is really the Debt per Capita (D/P) divided by the National Income (GDP). Doing this math for economic and population data from 1900 through 2005 gives us the following chart, which shows the Debt per Capita to Income ratio (multiplied by 1 billion, since the numbers come out to be really, really, really small, which we find to be really, really, really annoying):

As noted above, we get the numbers in this chart by multiplying the actual number produced by the math by 1 billion, which accounts the “Nominal GDP billions USD” part of the title displayed in the chart above.

So, again, what does this do for us? As it happens, perhaps the most useful application of this index is to allow us to quickly calculate the equivalent National Debt per Capita for any year automatically adjusted in terms of the economy of the year for which we select a GDP figure. We accomplish this by taking a given year's nominal GDP data and multiplying it by the Index value for a year in which we're interested. This allows us to express the relative debt load carried in previous years with the current year and vice versa.

For example, if we select the 2005 GDP figure of $12.589 trillion USD (or $12,589 billion USD), we can show that in terms of today's economy and population, the National Debt per Capita figure in 1995 was an equivalent $32,210. Likewise, in terms of 1995’s GDP level of $7,398 billion USD, we see that today's National Debt per Capita is $15,705 USD, a 17% reduction (in terms of 1995's national income) from the 1995 National Debt per Capita figure of $18,926 USD. The following chart shows the equivalent National Debt per Capita for the period from 1900 to 2005 in terms of 2005 National Income:

Given how relatively flat the National Debt per Capita has been in the last 5 years, I would almost argue that the amount of debt spending agreed to by the U.S. Congress each year takes something like the National Debt per Capita to Income Index into account. Now that the federal government is pushing the edge of the arbitrarily legislated nominal National Debt Limit, it will be interesting to see if this factor plays a role in setting the amount of the increase of this artificial limit.

Previously on Political Calculations

The following posts provide additional background and links to the original data sources used in the calculations described above:

Marketing involves the development of strategies for the purpose of persuading people to purchase certain products or services. To do this, marketers will try to get into the heads of their potential consumers - seeking to understand the things that they want or need, as well as what motivates them to buy a given product or service.

Their means of doing so makes extensive use of demographic research, taking factors such as geography, income, interests, age, etc. into account in designing their marketing strategies. They also make extensive use of surveys and marketing studies - finding out just what it will take to convince a potential customer to buy Product A instead of Product B. Then they take all this work and build a sales strategy sure to create "buzz" around the product or service they want to sell - with the reward being measured in the increased sales that come in after a new marketing campaign is successfully launched.

Of course, that assumes the marketing campaign will work. Political Calculations finds it much more interesting when a carefully designed marketing campaign falls flat on its face, such as when a product is introduced into a new market (such as a foreign country) with disasterous results. Many examples of marketing meltdown follow:

Coors put its slogan, "Turn it loose," into Spanish, where it was read as "Suffer from diarrhea."

Clairol introduced the "Mist Stick," a curling iron, into German only to find out that "mist" is slang for manure. Not too many people had use for the "manure stick".

Scandinavian vacuum manufacturer Electrolux used the following in an American campaign: Nothing sucks like an Electrolux.

The American slogan for Salem cigarettes, "Salem-Feeling Free", was translated into the Japanese market as "When smoking Salem, you will feel so refreshed that your mind seems to be free and empty."

When Gerber started selling baby food in Africa, they used the same packaging as in the US, with the beautiful baby on the label. Later they learned that in Africa, companies routinely put pictures on the label of what's inside, since most people can't read English.

An American T-shirt maker in Miami printed shirts for the Spanish market which promoted the Pope's visit. Instead of "I saw the Pope" (el Papa), the shirts read "I saw the potato" (la papa).

In Italy, a campaign for Schweppes Tonic Water translated the name into "Schweppes Toilet Water."

Pepsi's "Come alive with the Pepsi Generation" translated into "Pepsi brings your ancestors back from the grave," in Chinese.

When Parker Pen marketed a ballpoint pen in Mexico, its ads were supposed to say "It won't leak in your pocket and embarrass you." However, the company mistakenly thought the spanish word "embarazar" meant embarrass. Instead the ads said that "It wont leak in your pocket and make you pregnant."

The name Coca-Cola in China was first rendered as Ke-kou-ke-la. Unfortunately, the Coke company did not discover until after thousands of signs had been printed that the phrase means "bite the wax tadpole" or "female horse stuffed with wax" depending on the dialect. Coke then researched 40,000 Chinese characters and found a close phonetic equivalent, "ko-kou-ko-le," which can be loosely translated as "happiness in the mouth."

Also in Chinese, the Kentucky Fried Chicken slogan "finger-lickin' good" came out as "eat your fingers off."

When General Motors introduced the Chevy Nova in South America, it was apparently unaware that "no va" means "it won't go." After the company figured out why it wasn't selling any cars, it renamed the car in its Spanish markets to the Caribe.

Colgate introduced a toothpaste in France called Cue, the name of a notorious porno magazine.

It seems to me that the first two items you note as challenges for the US economy are closely interlinked. Both have been highly driven by two factors: the devaluing of the US dollar, which has made products exported into the US much more expensive, and the high world demand for oil combined with hurricane damage to the US' oil production infrastructure. While the oil supply shortage (and corresponding links to the current account deficit and inflation) will be corrected as damaged facilities are repaired over time, the more serious concern will be whether the US will continue policies pursuing dollar devaluation. My guess is that the US dollar will stabilize this year, reducing the growth of both the current account deficit and inflation.

The housing bubble situation is another story - in the world of real estate, it's all about location, location and location. As it stands, where the housing bubble appears to have been greatest, it already appears to have ended (in the northeast and on the west coast). Meanwhile, high growth areas (such as the southwest) should continue to see continued growth in housing values, although at slower rates as interest rates have risen.

2006 should see economic growth in the US slow as other sectors of the economy begin picking up the slack as the recent boom in the US real estate market leaves off. With investors not having the single booming market of real estate in which to invest, look for more general growth in other sectors - particularly in manufacturing. For example, all those orders Boeing has taken this year will begin turning into dollars as those aircraft are built and delivered. This increase in production will have the benefit of also reducing the current account deficit, as the majority of these newly produced aircraft will be exported (remember, the dollar devaluation policy does benefit US manufacturing exports). As a result, I would expect that aerospace, which has been a huge, missing piece of the US economy for the last several years, will gain considerable strength in the next year.

Update: An informed reader, pointing to a recent paper from the American Enterprise Institute, has confirmed that the US dollar, while still much weaker than in recent years, appears to have stabilized in value in this year and has even gained in strength relative to other major world currencies. Oddly enough, I think this only makes my predictions more valid, but let's see how long those hold up....

Air America Radio's Board of Directors: Who Are These People?

While much of the focus of the investigations and lawsuits being aimed at the management of Air America Radio (AAR) has focused upon the scandals surrounding the network, there is been little information about the people who make up the AAR's parent company's Board of Directors who are directly responsible for how the company deals with its ongoing issues. In analyzing the business strategies that AAR might pursue, Political Calculations has accumulated the following very basic background information for AAR's top brass. The parent company with which the individual is associated is indicated in parentheses by their name below. Those whose names appear without a company are associated with both AAR's original parent company, Progress Media/Radio Free America, and its successor, Piquant LLC:

Evan Montvel Cohen (Progress Media/Radio Free America)

Co-founder of Air America Radio and former CEO of Progress Media/Radio Free America. Cohen's previous management experineces includes having served as the chief of staff for Republican Governor of Guam Tommy Tanaka, who was defeated for re-election by Carl T.C. Gutierrez in 1994. In a subsequent gubernatorial election, Cohen testifed on behalf of Democrat Governor Gutierrez against Republican Joseph Ada who challenged the election results.

Cohen is the main link between the Gloria Wise Foundation, serving as a director, and how Air America Radio originally received taxpayer funds that had been earmarked for the Foundation's community programs, including its Boys and Girls Club chapter and support programs for Alzheimer's patients.

Madison, Wisconsin based investors in Air America. Former Madison-based broadcast meteorologist Terence F. Kelly is the CEO of Weather Central, Inc., which provides Internet weather reports and computerized graphic displays for televised weather reports. Married over 30 years to Mary Kelly.

Kelly played a key role in keeping Air America Radio afloat until new financing could be obtained in 2004, serving as the Chairman of company's Board of Directors through its transition from Progress Media/Radio Free America to the Piquant LLC. Mary Kelly also filled this role for a brief time.

Co-founders of Air America Radio. Chicago suburb Highland Park, Illinois based husband and wife who originated the idea to begin a "progressive" talk radio network, which later became Air America Radio. Primarily a venture capitalist, Sheldon Drobny is the Chairman and Managing Director of the Paradigm Group II, and is a leading stockholder in Illinois Superconductor, Cypress Bioscience, AnShell Media (the entity that later became AAR parent company Progress Media) and XML Global among others. Anita Drobny served as the Chairwoman of the Board of AAR's current parent entity, Piquant LLC, and now serves as the Chairwoman of Drobny's new venture, Nova M.

Trial attorney based in Pensacola, Florida. Known primarily for being the lead counsel in many major product liability cases against the pharmaceutical, industrial products, insurance and stock brokerage industries.

Papantonio also has served as an on-air personality for Air America Radio's weekend Ring of Fire program.

Owner of Norman Wain & Associates. Former media owner and operator. Currently an adjunct professor at Case Western Reserve University. Investor involved with transition between Progress Media and Piquant LLC.

Left-wing political financier who notably employed current Washington U.S. Senator Maria Cantwell as an executive in the interval from when she lost her U.S. House of Representatives seat in 1994 to when she was elected to the U.S. Senate in 2000. Current chairman of Piquant LLC (since December 2004.) CEO of RealNetworks, which develops and markets software for broadcasting audio information over the Internet. Provided and/or organized second major infusion of investment capital for Air America Radio, as well ongoing financial support.

Interesting tidbit: Should current Air America on-air host Al Franken run for the U.S. Senate in Minnesota, as rumored, and win, it would mark the second time that one of Glaser's employees moved directly from a payroll over which he has oversight and control to the U.S. Senate. That's no small thing - in 2000, Maria Cantwell was able to largely self-finance her senate campaign through her accumulated earnings from Glaser's RealNetworks.

Earlier this year, Political Calculations noted the obscene corporate rent-seeking behavior that was unleashed by an amendment authored by Senator Robert C. Byrd that redirected federal tariff revenues away from the U.S. Treasury to instead go to companies found to be "disadvantaged" by the importing of goods at "unfairly" low prices.

A festering trade dispute between the United States and several major trading partners appears set to subside after the Senate voted yesterday to repeal an anti-dumping law that was ruled illegal by the World Trade Organization.

The Senate action, which came as part of a broader budget bill that passed with Vice President Cheney's tie-breaking vote, would phase out the Byrd amendment, a five-year-old measure especially popular with lawmakers from industrial states heavily affected by foreign competition. The House has already voted to repeal the amendment, named for Sen. Robert C. Byrd (D-W.Va.), in nearly identical legislation.

That it took a ruling by the World Trade Organization to make the U.S. government stop doing this particular stupid thing that threatened to severely damage U.S. businesses and consumers through retalitory tariffs reflects poorly on our national politicians. Still, the attraction to keep their rent-seeking campaign donors happy was too much to resist:

The repeal would be delayed for two years, giving some U.S. lumber firms and other companies the chance to continue receiving substantial sums under the amendment. That compromise was necessary to secure yesterday's vote.

Companies looking to milk the flow of "free" money to get their "fair" share while the clock is still ticking should note how the companies that have disproportionately benefitted the most from the scheme have done so (from the October 4, 2005 Wall Street Journal via Truth About Trade and Technology):

These companies won the Byrd lottery by figuring out that payouts depend more on how many claims are filed than on whether they are valid. U.S. Customs and Border Protection, which is charged with collecting and disbursing the Byrd duties, has more claims than it can handle so it uses a pro-rata formula for disbursements. This, as GAO drily notes, has created "an incentive for producers to claim as many expenses as possible relative to other producers."

Never mind that it's wrong - it's legal! Besides, if enough "disadvantaged" companies suck up the available funds fast enough, that's that much sooner the Byrd Amendment will hit the scrap heap of really poorly thought out bad legislation. It also has the benefit of having the potential to really irritate the companies that are already exploiting the system, since having more companies come in to claim they are "disadvantaged" would limit their expected revenue from the program. Finally, it would also put us another day closer to when the fed-up and ripped-off masses might finally be free to pull down that stupid statue, just like they did in Iraq....

Did you ever wonder if investing in your company's stock through an Employee Stock Purchase Plan is a good idea? The Early Riser did the math, but here's the companion tool to go along with the discussion at the Early Riser's blog. The numbers below are the Early Riser's default numbers:

Basic Investment Information

Input Data

Values

Your Annual Pay ($USD)

Percentage of Annual Pay to Be Invested (%)

Number of Contribution Periods per Year

Stock Purchase Plan Discount Rate (%)

Fixed Rate Commission on Selling Transactions ($USD)

Annualized Returns

Calculated Results

Values

Effective Annualized Rate of Return (%)

Words of Caution

The Early Riser notes a few words of caution:

Each ESP plan is structured differently so read yours carefully

The key to this being almost risk free is your ability to sell the stock immediately - if your plan restricts your selling, you have much more downside risk and this may not be for you

The profit is taxed like regular income... make sure you save some of your profits to pay the tax man

The ideas about science quoted below were taken from the essays, exams, and classroom discussions of 5th and 6th graders. They illustrate Mark Twain's contention that the 'most interesting information comes from children, for they tell all they know and then stop.'

Q: What is one horsepower?

A: One horsepower is the amount of energy it takes to drag a horse 500 feet in one second.

You can listen to thunder after lightning and tell how close you came to getting hit. If you don't hear it, you got hit, so never mind.

Talc is found on rocks and on babies.

The law of gravity says no fair jumping up without coming back down.

When they broke open molecules, they found they were only stuffed with atoms. But when they broke open atoms, they found them stuffed with explosions.

When people run around and around in circles we say they are crazy. When planets do it we say they are orbiting.

Rainbows are just to look at, not to really understand.

While the earth seems to be knowingly keeping its distance from the sun, it is really only centrificating.

Someday we may discover how to make magnets that can point in any direction.

South America has cold summers and hot winters, but somehow they still manage.

Most books now say our sun is a star. But it still knows how to change back into a sun in the daytime.

Water freezes at 32 degrees and boils at 212 degrees. There are 180 degrees between freezing and boiling because there are 180 degrees between north and south.

A vibration is a motion that cannot make up its mind which way it wants to go.

There are 26 vitamins in all, but some of the letters are yet to be discovered. Finding them all means living forever.

There is a tremendous weight pushing down on the center of the Earth because of so much population stomping around up there these days.

Lime is a green-tasting rock.

Many dead animals in the past changed to fossils while others preferred to be oil.

Genetics explain why you look like your father and if you don't why you should.

Vacuums are nothings. We only mention them to let them know we know they're there.

Some oxygen molecules help fires burn while others help make water, so sometimes it's brother against brother.

Some people can tell what time it is by looking at the sun. But I have never been able to make out the numbers.

We say the cause of perfume disappearing is evaporation. Evaporation gets blamed for a lot of things people forget to put the top on.

To most people solutions mean finding the answers. But to chemists solutions are things that are still all mixed up.

In looking at a drop of water under a microscope, we find there are twice as many H's as O's.

Clouds are high flying fogs.

I am not sure how clouds get formed. But the clouds know how to do it, and that is the important thing.

Clouds just keep circling the earth around and around. And around. There is not much else to do.

Water vapor gets together in a cloud. When it is big enough to be called a drop, it does.

Humidity is the experience of looking for air and finding water.

We keep track of the humidity in the air so we won't drown when we breathe.

Rain is often known as soft water, oppositely known as hail.

Rain is saved up in cloud banks.

In some rocks you can find the fossil footprints of fishes.

Cyanide is so poisonous that one drop of it on a dogs tongue will kill the strongest man.

A blizzard is when it snows sideways.

A hurricane is a breeze of a bigly size.

A monsoon is a French gentleman.

Thunder is a rich source of loudness.

Isotherms and isobars are even more important than their names sound.

It is so hot in some places that the people there have to live in other places.

Economically speaking, 2004 was a momentous year for the European Union, as the EU added ten new nations encompassing nearly 75 million people to its ranks. Political Calculations has mined the economic and population data for the world's Number 2 economic behemoth (after the United States) to produce the dynamic table below, which you may sort from A to Z, highest to lowest, richest to poorest (and vice-versa) by clicking upon the individual column headings. To make things more interesting, we've broken out the 2004 economic performance for the 15 members of the European Union prior to expansion (marked as "EU15" in the Group column below), the 10 new members who joined in May 2004 (marked as "EU25"), and finally the entire combined colossus (marked as "All"). Each nation's Gross Domestic Product (GDP) has been adjusted for Purchasing Price Parity (PPP) with the results presented in Year 2004 U.S. dollars (USD).

European Union 2004 GDP-PPP, Population and GDP-PPP per Capita

Country

Group

GDP-PPP (billions $USD)

Population (2004 est.)

GDP-PPP per Capita ($USD)

Austria

EU15

255.9

8174762

31304

Belgium

EU15

316.2

10348276

30556

Cyprus

EU25

20.3

775927

26098

Czech Republic

EU25

172.2

10246178

16806

Denmark

EU15

174.4

5413392

32216

Estonia

EU25

19.2

1341664

14333

Finland

EU15

151.2

5214512

28996

France

EU15

1737.0

60424213

28747

Germany

EU15

2362.0

82424609

28656

Greece

EU15

226.4

10647529

21263

Hungary

EU25

149.3

10032375

14882

Ireland

EU15

126.4

3969558

31842

Italy

EU15

1609.0

58057477

27714

Latvia

EU25

26.5

2306306

11503

Liechtenstein

EU15

0.8

33436

24674

Lithuania

EU25

45.2

3607899

12536

Luxembourg

EU15

27.3

462690

58938

Malta

EU25

7.2

396851

18201

Netherlands

EU15

481.1

16318199

29482

Poland

EU25

463.0

38626349

11987

Portugal

EU15

188.7

10524145

17930

Slovakia

EU25

78.9

5423567

14546

Slovenia

EU25

39.4

2011473

19593

Spain

EU15

937.6

40280780

23277

Sweden

EU15

255.4

8986400

28421

United Kingdom

EU15

1782.0

60270708

29567

EU15

EU15

10631.4

381550686

27864

EU25

EU25

1021.3

74768589

13659

European Union

All

11652.7

456319275

25536

Looking at the New Members

When the European Union expanded to 25 members in 2004, the 10 nations it added, if taken together and considered to be just one nation, would rank behind Italy as the fifth largest nation of the European Union in terms of GDP-PPP and second behind Germany in population. The 10 nations combined would also collectively be the poorest nation of the European Union, falling well behind the poorest EU15 nation of Portugal in the measure of GDP-PPP per capita - a legacy of the totalitarian governments and communist economic systems that constricted many of the new members' economic production potential for much of the twentieth century.

The Richest and Poorest Nations of the EU

There are actually three subcategories here, all measured by GDP-PPP per capita: the richest and poorest nations of the EU15 (the members of the European Union before 2004), the richest and poorest nations of the EU25 (the nations that joined in 2004) and finally, the richest and poorest nations of the entire European Union.

For the EU15, the richest nation is Luxembourg, whose status as a tax haven gives this small nation an outsized GDP given the associated strength of its banking and financial sectors, followed by Denmark. The poorest EU15 nation is Portugal, whose GDP-PPP per capita of $17,930 USD falls well behind next poorest EU15 nation Greece.

Looking at the ten nations that joined the European Union in 2004, the richest is the island nation of Cyprus (including the Turkish-Cypriot controlled portion of the island), followed by Slovenia. The poorest nation among the ten new EU members is Latvia, which is closely followed by Poland in the GDP-PPP per capita ranking.

For the EU as a whole, Luxembourg is the richest nation and Latvia is the poorest. Of the 10 new members added in 2004, only Cyprus ranks ahead of the average GDP-PPP per Capita of all twenty-five members of the EU.

Rob May, aka BusinessPundit, has finally put out his top business book picks for Christmas gifts - good thing they're relatively easy to find with just 4 shopping days left until Christmas! I'll second Rob's choices for the following books:

Peter Bernstein's fantastic history that maps the advance and development of statistics and risk management from esoteric theory to everyday tools for the modern business manager. If you're a fan of economic history, I also recommend John Steele Gordon's Empire of Wealth: The Epic History of American Economic Power, particularly for anyone you know someone who gets overly worked up by U.S. business clout (but that's just my ornery nature....)

Welcome to the 27th edition of the Carnival of Personal Finance! This week's edition of the Carnival of Personal Finance is presented using dynamic tables. You may click upon any of the column headings below to sort this week's contributions according to blog name, post title, category and description. If you're using a modern web browser, the table will automatically rearrange itself according to the heading you selected! Clicking the column heading again will rearrange the table in reverse order.

You might have visited Political Calculations to use the tools developed here over the past year, but you should also know about the useful applications created by Hugh Chou - one of the real pioneers of bringing tools for solving personal finance problems to the Internet.

Personal information stored on computer tape has again become lost during shipping, exposing many people to possible identity theft. There's an easy solution to this problem - encryption - but what will it take to make companies start safeguarding their customer's data?

Jane Dough wonders if things are really this bad for the middle-class, where a recent report indicates that many are taking on second jobs to make ends meet.... Are all those BMW's in the mall parking lot employee cars or customers?

Jonathan is going to try a free financial planning consultation with Ameriprise Financial Advisors. But how qualified are these people to tell anyone how to handle their money? Or are they really salespeople?

Contributing or Hosting Future Editions of the Carnival of Personal Finance

Bloggers interested in hosting a future edition of the Carnival of Personal Finance should e-mail flexo –at– consumerismcommentary –dot– com. More details about hosting responsibiilities are available at Consumerism Commentary, as well as a schedule of future hosting opportunities.

Acknowledgements

My special thanks to Flexo of Consumerism Commentary for the opportunity to host the Carnival of Personal Finance for this week and to all the bloggers who made contributions! Bloggers looking for information on how to implement the sorting table function in their own blogs may find very useful information on this function and many others at The Daily Kryogenix.

One of the things that I'm always surprised by is how many people come across this Scrappy Little-Read Blog(TM) by searching for GDP in Africa. To that end, today, we're updating our previous look at GDP in Africa with the latest data available, the figures released for GDP-PPP (Gross Domestic Product adjusted for Purchasing Power Parity), population and GDP-PPP per capita for 2004. The information is presented in a dynamic table format, which allows you to rank the data either from lowest to highest or vice-versa in the table by clicking the individual column headings:

GDP of African Nations: 2004

Country

GDP-PPP (billions $USD)

Population (2004 est.)

GDP-PPP per Capita

Algeria

212.3

32129324

6608

Angola

23.2

10978552

2110

Benin

8.3

7250033

1150

Botswana

15.1

1561973

9635

Burkina Faso

15.7

13574820

1159

Burundi

4.0

6231221

642

Cameroon

30.2

16063678

1878

Cape Verde

0.6

415294

1445

Central African Republic

4.2

3742482

1135

Chad

15.7

9538544

1642

Congo, Democratic Republic of the

42.7

58317930

733

Congo, Republic of the

2.3

2998040

775

Cote d'Ivoire

24.8

17327724

1430

Djibouti

0.6

466900

1326

Egypt

316.3

76117421

4155

Equatorial Guinea

1.3

523051

2428

Eritrea

4.2

4447307

934

Ethiopia

54.9

67851281

809

Gabon

8.0

1355246

5878

Gambia, The

2.8

1546848

1809

Ghana

48.3

20757032

2325

Guinea

19.5

9246462

2109

Guinea-Bissau

1.0

1388363

726

Kenya

34.7

32021856

1083

Lesotho

5.9

1865040

3159

Liberia

2.9

3390635

856

Libya

37.5

5631585

6655

Madagascar

14.6

17501871

832

Malawi

7.4

11906855

622

Maldives

1.3

339330

3684

Mali

11.0

11956788

920

Mauritania

5.5

2998563

1846

Mauritius

15.7

1220481

12847

Morocco

134.6

32209101

4179

Mozambique

23.4

18811731

1243

Namibia

14.8

1954033

7554

Niger

9.7

11360538

855

Nigeria

125.7

137253133

916

Rwanda

10.4

7954013

1311

Sao Tome and Principe

0.2

181565

1179

Senegal

18.4

10852147

1692

Sierra Leone

3.3

5883889

567

Somalia

4.6

8304601

554

South Africa

491.4

42718530

11503

Sudan

76.2

39148162

1946

Swaziland

6.0

1169241

5147

Tanzania

23.7

36588225

648

Togo

8.7

5556812

1563

Tunisia

70.9

9974722

7106

Uganda

39.4

26404543

1492

Zambia

9.4

10462436

899

Zimbabwe

24.4

12671860

1923

Africa (All)

2087.7

872121812

2394

Analyzing the Data

The Richest and Poorest Nations of Africa

The richest nations in Africa in 2004 are unchanged from the previous 2002 data. The island nation of Mauritius is still the top-ranked (according to GDP-PPP per capita), with the nations of South Africa and Botswana next in line.

At the other end of the spectrum, the poorest nation in Africa is Somalia, which swapped places with 2002's poorest African nation Sierra Leone in this 2004's rankings.

Biggest Changes Since 2002

The biggest drop between 2002 and 2004 occurred for Liberia, whose civil war in the intervening years saw the nation's GDP-PPP per capita reduced by nearly 20%. The nations of the Central African Republic, Guinea-Bissau, Libya and Zimbabwe also saw substantial declines (greater than 10%) in GDP-PPP per capita during this period as well.

At the positive end, Chad realized a more than 51% gain in its GDP-PPP per capita between 2002 and 2004. The next greatest increase occurred in Angola, which saw a 34% increase in its GDP-PPP per capita.

Political Calculations doesn't have the kind of time it takes to do the high-quality research that we'd really like to do in the field of evolutionary biology, but even if we did, we don't think we'd spend much time doing the following kind of study....

Whenever I get a package of plain M&Ms, I make it my duty to continue the strength and robustness of the candy as a species.

To this end, I hold M&M duels.

Taking two candies between my thumb and forefinger,I apply pressure, squeezing them together until one of them cracks and splinters. That is the "loser," and I eat the inferior one immediately. The winner gets to go another round.

I have found that, in general, the brown and red M&Ms are tougher, and the newer blue ones are genetically inferior. I have hypothesized that the blue M&Ms as a race cannot survive long in the intense theatre of competition that is the modern candy and snack-food world.

Occasionally I will get a mutation, a candy that is misshapen, or pointier, or flatter than the rest. Almost invariably this proves to be a weakness, but on very rare occasions it gives the candy extra strength. In this way, the species continues to adapt to its environment.

When I reach the end of the pack, I am left with one M&M, the strongest of the herd. Since it would make no sense to eat this one as well, I pack it neatly in an envelope and send it to: M&M Mars, A Division of Mars, Inc. Hackettstown, NJ 17840-1503 U.S.A., along with a 3x5 card reading, "Please use this M&M for breeding purposes."

Back in early November, Jeffrey Cornwall's Entrepreneurial Mind featured a graphic that showed the growth the the U.S. tax code from the inception of the income tax in 1913 up through 2003, as measured by the number of pages of federal tax rules. The image was a little difficult to read, so Political Calculations has created the following version of the image which we hope offers an improvement:

As an exercise, we here at Political Calculations decided to measure the annualized growth rate of the U.S. tax code, as measured between the intervals given in the chart above. The following chart shows what we came up with:

What we see in this chart is that the tax code has, by and large, grown at an annual average rate between 0.9% (the rate of growth between 1913 and 1939) and 6.1% (averaging between 3.0 and 4.0% growth per year), with two big exceptions. The biggest exception occurred during the World War II years between 1939 and 1945, when the U.S.' federal tax rules exploded from just being 504 pages long to 8,200 pages long - an average rate of growth of 59.2% per year! The second biggest annual change in the rate of growth of the U.S. tax code occurred between 2001 and 2002, when in just one year, federal tax rules grew from 45,562 pages to 52,310 pages in length - a 14.6% increase.

As measured by the speed of pleasantly surprised reaction in financial markets, in reaction to a very minor change in a statement issued by the Federal Reserve' Open Market Committee (FOMC) after increasing interest rates as expected today:

I'd say the spike in the Dow Jones Industrial index (DJI), Standard & Poor 500 index (GSPC), and Nasdaq index (IXIC) all happened at about the exact time the following news was reported:

2:15PM: As expected, the FOMC has raised the fed funds rate by 25 basis points to 4.25% and maintains that some further measured policy firming is likely; however, the Fed did drop the reference with regard to "policy accomodation." NYSE Adv/Dec 1489/1752, Nasdaq Adv/Dec 1232/1726

Today, Political Calculations is ranking the nations of the Western Hemisphere, looking at their GDP-PPP (Gross Domestic Product adjusted for Purchasing Power Parity), population and GDP-PPP per capita of the independent nations of North America, South America, Central America and the Carribbean. The information is presented in a dynamic table format, which means that you may rank the data either from least to greatest or greatest to least in the table by clicking the individual column heads:

GDP of the Americas: 2004 Edition

Country

GDP-PPP (billions $USD)

Population (2004 est.)

GDP-PPP per Capita

Antigua and Barbuda

0.8

68320

10978

Argentina

483.5

39144753

12352

Bahamas, The

5.3

299697

17668

Barbados

4.6

278289

16418

Belize

1.8

272945

6514

Bolivia

22.3

8724156

2560

Brazil

1492.0

184101109

8104

Canada

1023.0

32507874

31469

Chile

169.1

15823957

10686

Colombia

281.1

42310775

6644

Costa Rica

38.0

3956507

9597

Cuba

33.9

11308764

2999

Dominica

0.4

69278

5543

Dominican Republic

55.7

8833634

6303

Ecuador

49.5

13212742

3747

El Salvador

32.4

6587541

4911

Falkland Islands (Islas Malvinas)

0.1

2967

25278

French Guiana

1.6

191309

8107

Greenland

1.1

56384

19509

Grenada

0.4

89357

4924

Guatemala

59.5

14280596

4164

Guyana

2.9

705803

4107

Haiti

12.1

7656166

1574

Honduras

18.8

6823568

2754

Jamaica

11.1

2713130

4102

Mexico

1006.0

104959594

9585

Netherlands Antilles

2.5

218126

11232

Nicaragua

12.3

5359759

2302

Panama

20.6

3000463

6856

Paraguay

29.9

6191368

4834

Peru

155.3

27544305

5638

Saint Kitts and Nevis

0.3

38836

8729

Saint Lucia

0.9

164213

5274

Saint Vincent and the Grenadines

0.3

117193

2918

Suriname

1.9

436935

4314

Trinidad and Tobago

11.5

1096585

10469

United States

11750.0

293027571

40099

Uruguay

49.3

3399237

14494

Venezuela

145.2

25017387

5804

The Americas (All)

16986.8

870598188

19512

Analyzing the Data

The Richest and Poorest Nations of the Americas

For 2004, the United States maintains a dominating spread over second-place Canada to again earn the title of being the richest nation in the Americas. When we break the field into subcategories that do not include the U.S.: South America, the Caribbean, and Central America. We find that for South America, the economic powerhouse of that continent, as measured by GDP-PPP per Capita, is Uruguay, followed closely by Argentina. Looking at the Carribbean region, The Bahamas leads Barbados. Finally, the richest nation in Central America is Costa Rica, which is closely followed by Mexico in the measure of GDP-PPP per Capita.

Haiti continues to be the poorest nation in the Western Hemisphere, falling far behind next lowest economic performer Nicaragua.

Biggest Changes Since 2002

Hands down, the biggest percentage change from 2002 to 2004 belongs to Uruguay, which increased from a GDP-PPP per Capita figure of $7,764 USD in 2002 to $14,494 USD in 2004 - an average annualized rate of change of 36.6%! The U.S. Department of State describes how Uruguay achieved this phenomenal rate of growth:

Uruguay's spectacular recovery over the past couple of years has been based on increased exports, especially to North America. The U.S. became Uruguay’s largest export market in 2004, thanks in large part to meat exports. Uruguay enjoys a positive investment climate, with a strong legal system and open financial markets. It grants equal treatment to national and foreign investors and, aside from very few sectors, there is neither de jure nor de facto discrimination toward investment by source or origin.

This growth came after a period in which Uruguay went through one of the "steepest economic and financial crisis in recent history," which followed a convergence of crises occurring with the country's major trading partners in South America, and which contributed to low GDP output in 2002.

I realize that I’m treading on the Skeptical Optimist’s turf here, but since I’ve been playing with the U.S. National Debt and National Income data, it was just a matter of time! As the Skeptical Optimist would note, the ratio of a nation's debt to its income (as measured by its nominal Gross Domestic Product) provides a better picture of its overall fiscal health than looking at the level of each on its own. The following chart shows the ratio of the U.S.' Debt-to-Income (DTI) ratio from 1900 to 2005:

The values in this chart differ from those offered by the Skeptical Optimist largely due to the data having been drawn from different sources. Using Political Calculations' data source, we show the U.S.' DTI ratio to be 63%, while the Skeptical Optimist showed a DTI ratio of 65.2% for the most recent data. Regardless of the exact level, the main fact immediately evident from the chart, as it concerns us today, is that U.S.' DTI ratio has been essentially stable in its current range (between 57.3% and 67.2%) since the early 1990s.

Calculating the Debt-to-Income ratio can be valuable since it provides a quick way to calculate an equivalent level of debt in terms of a given year's nominal GDP for any other year. For example, how much debt, in today’s economy, would the U.S. have to have in order to match its all time high DTI ratio of 121.2% in 1946? We can find out quickly by multiplying the Debt-to-Income ratio by the value of U.S. Nominal GDP in 2005: $15,258 billion USD! The following chart shows this math for every year from 1900 through 2005:

Earlier this year, Political Calculations noted a study by the Sweden-based free-market advocacy group Timbro, which compared the relative wealth of the nations of Western Europe (the 15 members of the European Union prior to the EU being expanded in May 2004) against individual U.S. states. The key finding in Timbro's report (available as a 958KB PDF document) was that:

If the European Union were a state in the USA it would belong to the poorest group of states. France, Italy, Great Britain and Germany have lower GDP per capita than all but four of the states in the United States. In fact, GDP per capita is lower in the vast majority of the EU-countries (EU 15) than in most of the individual American states. This puts Europeans at a level of prosperity on par with states such as Arkansas, Mississippi and West Virginia.

Timbro's study was based on 2002 economic data, but since it was published, economic data for both 2003 and 2004 has been published. So, the question is now: what's changed in those two years? To find out, Political Calculations has created the following dynamic table comparing each U.S. state's Gross State Product (GSP) or each E.U. nation's Gross Domestic Product adjusted for Purchasing Power Parity (GDP-PPP) data for 2004, their respective populations and their corresponding per Capita economic data, which you may sort according to the column headings, either from highest to lowest value or vice-versa.

US vs EU: 2004 Edition

U.S. State or E.U. Nation

GSP or GDP-PPP (billions 2004 USD)

Population (July 2004 est.)

GSP or GDP-PPP per Capita

US - Alabama

139.8

4530182

30869

US - Alaska

34.0

655435

51909

US - Arizona

200.0

5743834

34812

US - Arkansas

80.9

2752629

29391

US - California

1550.8

35893799

43204

US - Colorado

200.0

4601403

43458

US - Connecticut

185.8

3503604

53032

US - Delaware

54.3

830364

65362

US - District of Columbia

76.7

553523

138540

US - Florida

599.1

17397161

34435

US - Georgia

343.1

8829383

38862

US - Hawaii

50.3

1262840

39848

US - Idaho

43.6

1393262

31273

US - Illinois

521.9

12713634

41050

US - Indiana

227.6

6237569

36484

US - Iowa

111.1

2954451

37609

US - Kansas

98.9

2735502

36171

US - Kentucky

136.4

4145922

32911

US - Louisiana

152.9

4515770

33869

US - Maine

43.3

1317253

32899

US - Maryland

228.0

5558058

41020

US - Massachusetts

317.8

6416505

49528

US - Michigan

372.2

10112620

36802

US - Minnesota

223.8

5100958

43878

US - Mississippi

76.2

2902966

26237

US - Missouri

203.3

5754618

35327

US - Montana

27.5

926865

29650

US - Nebraska

68.2

1747214

39024

US - Nevada

100.3

2334771

42967

US - New Hampshire

51.9

1299500

39916

US - New Jersey

416.1

8698879

47828

US - New Mexico

61.0

1903289

32056

US - New York

896.7

19227088

46639

US - North Carolina

336.4

8541221

39385

US - North Dakota

22.7

634366

35763

US - Ohio

419.9

11459011

36641

US - Oklahoma

107.6

3523553

30537

US - Oregon

128.1

3594586

35638

US - Pennsylvania

468.1

12406292

37730

US - Rhode Island

41.7

1080632

38569

US - South Carolina

136.1

4198068

32426

US - South Dakota

29.4

770883

38120

US - Tennessee

217.6

5900962

36880

US - Texas

884.1

22490022

39312

US - Utah

82.6

2389039

34579

US - Vermont

21.9

621394

35277

US - Virginia

329.3

7459827

44147

US - Washington

261.5

6203788

42160

US - West Virginia

49.5

1815354

27242

US - Wisconsin

211.6

5509026

38413

US - Wyoming

24.0

506529

47340

US - All States

11665.6

293655404

39959

EU - Austria

255.9

8174762

31304

EU - Belgium

316.2

10348276

30556

EU - Denmark

174.4

5413392

32216

EU - Finland

151.2

5214512

28996

EU - France

1737.0

60424213

28747

EU - Germany

2362.0

82424609

28656

EU - Greece

226.4

10647529

21263

EU - Ireland

126.4

3969558

31842

EU - Italy

1609.0

58057477

27714

EU - Luxembourg

27.3

462690

59003

EU - Netherlands

481.1

16318199

29482

EU - Portugal

188.7

10524145

17930

EU - Spain

937.6

40280780

23277

EU - Sweden

255.4

8986400

28420

EU - United Kingdom

1782.0

60270708

29567

EU - 15 (Members pre-2004)

10630.6

381517250

27864

Analyzing the Data

The Poorest US State and the Poorest EU-15 Nation in 2004

In ranking the data according to GSP or GDP per Capita, the poorest U.S. state is Mississippi, with a GSP per Capita of $26,237 USD (2004). For the EU-15, the poorest nation is Portugal, whose GDP-PPP per Capita (GDP per Capita adjusted for Purchasing Power Parity in equivalent U.S. dollars) is $17,930 USD.

The Richest US State and the Richest EU-15 Nation in 2004

Discarding the statistical outliers (see below), the richest U.S. state, as measured on a GSP per Capita basis is Delaware, with a GSP per Capita of $65,632 USD. Meanwhile, the richest EU-15 nation is Denmark with $32,216 USD GDP-PPP per Capita figure.

The "Rich" Statistical Outliers

According to the calculated GSP per Capita and the GDP-PPP per Capita data, the richest part of the United States is the District of Columbia (at $138,540 USD) and the richest part of Europe is Luxembourg (at $59,003 USD). Both figures are inflated well beyond the national average (more than double) due to each region's unique situation. The District of Columbia occupies some 61 square miles (158 square kilometers) and is the seat of the U.S. federal government, whose spending makes up the vast bulk of its GSP figure. Luxembourg is the smallest member of the EU, occupying some 998 square miles (2,586 square kilometers - slightly smaller than the U.S.' Rhode Island) and draws considerable capital flight from other countries to its banking institutions given the country's status as a tax haven.

Relative Comparison

In sorting the table from poorest to richest GSP or GDP-PPP per Capita, we see that the three EU-15 nations of Portugal, Greece and Spain are ranked lower than the two poorest U.S. states of Mississippi and West Virginia. Working our way up the GSP and GDP-PPP per Capita chain, we see that the EU-15 nations of Italy, the EU-15 as a whole, Sweden, Germany, France and Finland all rank below the next lowest U.S. state of Arkansas.

Continuing up the chain, we see that the Netherlands and the United Kingdom fall behind Montana and Oklahoma, while Belgium ranks behind Alabama and Idaho. Next, we see Austria and Ireland coming in behind New Mexico, while Denmark - the richest EU-15 nation behind statistical outlier Luxembourg, falls in behind South Carolina and the other 41 U.S. states.

If statistical outlier Luxembourg were a U.S. state, it would rank second behind top U.S. state Delaware.

As far as what has changed in two years time, the answer is "not much."

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